- Its Purpose, History, Duties and Mission
- May 9th, 1947 - The World Bank's First Loan
- Railway Reform: Toolkit For Improving Rail Sector Performance
- The Evolution of Banking Over Time
The Bank has more than 10, employees from over countries. Two-thirds work in Washington, DC. The rest are in country offices in the developing world. The World Bank has joined the fight against climate change because it could push another million people into poverty by That includes funding nations' plans to add 30 gigawatts of renewable energy by It also supports early warning systems for million people. It's developing climate-smart agriculture for 40 countries. The Bank also uses the true cost of carbon in all its projects.
The World Bank provides a wealth of downloadable data for more than countries. In , the Bank launched a new Open Data website. It provides free access to major indicators, including:. That made it the world's first multilateral development bank.
Its Purpose, History, Duties and Mission
They included family planning, pollution control, and environmental protections. World Bank lending became controversial. Their debt was often a result of overspending and extensive borrowing. The country had to agree to cut back on spending and support its currency.
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US Economy World Economy. By Kimberly Amadeo. The Bank works closely with three other organizations in the World Bank Group:. The International Finance Corporation IFC provides investment, advice, and asset management to companies and governments. It settles investment disputes between investors and countries. To achieve this goal, the Bank focuses on six areas:. Overcome poverty by spurring growth, especially in Africa.
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Help reconstruct countries emerging from war, the biggest cause of extreme poverty. Provide a customized solution to help middle-income countries remain out of poverty.
May 9th, 1947 - The World Bank's First Loan
Spur governments to prevent climate change. Work with the Arab League on three goals. Share its expertise with developing countries. Climate change, the environment, and energy. The IBRD began formal operations in This is one of the largest loans ever made by the bank in real terms at 2. As preconditions to this loan, France had to agree to prepare a balanced budget and give priority to repayment of this loan over other governments. The French government was also made to remove its members associated with the communist party before the loan was approved. Loans were also made to Luxembourg, Denmark and Sweden.
The world bank has established polices on the basis of the first few loans given by it. The loans granted are always at interest rates related to the borrowing costs of the bank, the funds go to only the intended project and never to finance trade deficits. The bank also receives priority in loan repayment over other governments.
Alternative sources of funds were now available for European Nations. Faced with this competition, the World Bank began to shift its focus towards developing countries. Over the course of time different institutions have been established under the World Bank umbrella which work in tandem, but have slightly different objectives and are separate legal entities. In , the International Development Association IDA was established which granted highly concessional loans to the poorest countries.
Nations which receive IDA loans have a ten year grace period after which they need to repay the loans. Repayment periods are usually about 40 years. These loans are referred to as soft loans. The IFC which was set up in provides loans to the private sector of a nation after being given a sovereign guarantee. The ICSID set up in provides facilities to help countries arbitrate investment disputes and has solved cases so far.
MIGA which was set up in promotes investments in emerging economies by offering guarantees to protect investors against losses from non-commercial risks.
Railway Reform: Toolkit For Improving Rail Sector Performance
In the first decade of its existence, it worked to assist in the reconstruction of Europe. In the s and s, investments in industry and infrastructure dominated its portfolio. The Bank used more direct methods to reduce poverty in the s. Structural adjustments were focused on the s. Sustainable development received importance in the s and s. Lending is currently based on a country partnership framework and the projects alignment to the eleven broad themes rural development, human development, environmental management etc.
The Evolution of Banking Over Time
The World Bank group has cumulative commitments of 1. The bank has established concentration limits for each country. A surcharge of 50 basis points is levied on loans above The bank has never written off any loans made to any country. The fact that the customers are also stakeholders in the Bank is an added incentive for loan repayment.
The practice is to not reschedule interest or principal payments on loans. The bank has a policy of freezing loan approvals and disbursements if a country fails to pay obligations on time. The bank is a commercial organisation, which makes only a small profit given its scale of operations. The profit gained is put back into strengthening the banks operations.
The coupon payments are either fixed, monthly or semi-annually. The World Bank also issues green bonds from which the money raised is spent exclusively on clean technologies and climate change related activities. The Bonds issued by the bank have been AAA rated for over 50 years. The AAA rating of the bonds allows it to borrow at a low rate of interest and can therefore provide cheaper funding for developing nations.
The Banks bonds are among the safest instruments in the world. The bank is a very conservative organisation and has a maximum gearing ratio of So far, it has only issued. The callable capital is an amount which the member nations owe the bank, but are only required to give when asked by the Bank. All member nations of the World Bank are represented by the Board of Governors.
The Board of Governors are the ultimate policy makers at the bank. Each country appoints one Governor and one alternate governor to the Board of Directors.